Atta’s woes deepen
IT is already strange that a company has to be suspended because of criminal investigations into its premises. It’s even worse when its fundamentals are impacted due to the police investigations.
Police investigations take a long time to conclude. For drug-related offences, it can take up to five years before a conclusive decision. So, what does a company and its shareholders do while waiting for the investigations to be completed?
This is the predicament facing the shareholders of ATTA Global Bhd, a company that was suspended after police busted its factory in Prai, Penang for drug-related offences. The company’s executive chairman and major shareholder, Ooi Chieng Sim, has been detained to assist in investigations.
According to Atta Global, the case is to come up for mention in the High Court on March 23. Ooi has been suspended from the board and the company has announced a new chairman in Chiok Kian Chau. Apart from Chiok, an executive director, Tan Kim Hee who holds 21%, has been chosen by the board to lead the company.
However, the company stated that the operations of a subsidiary, Syarikat Perkilangan Besi Gaya (SPBG), has completely ceased to facilitate the drug investigations. Loss-making SPBG contributes to 40% of Atta Global’s revenue and will have an adverse impact on the company.
The business conditions of the other subsidiaries in the company have also become more difficult because suppliers and customers have adopted a more cautious stand in their dealings, the company said. Nevertheless, the board and management is making every effort to explain the situation.
It looks like Atta Global is going to take some time before it recovers from the incident, which has caught all investors by surprise. The company has been suspended for a few weeks and nobody can say for sure how long it will remain that way.
Until the investigations are cleared, it is going to be tough for shareholders.
DEMAND for cement in a country is a good dipstick to determine the amount of construction activity taking place.
While news headlines may talk about mega-infrastructure projects, what actually happens at the ground level may be a different story.
In Malaysia’s case, a clear sign of slackening demand can be seen from the results recently posted by Malayan Cement Bhd, which commands 40% of the local cement market.
In its latest quarterly report, Malayan Cement reported an 18% drop in revenue and said that this was contributed by lower domestic demand.
The group expects domestic demand for cement to remain soft this year and said it will continue with its cost-cutting measures.
Interestingly, there have been concerns that cement prices were actually rising, and that it should have been reflected in cement producers’ bottom lines.
A recent report by UOB Kay Hian Malaysia Research pointed out that for 2019, cement demand had declined while prices had improved.
The research house said cement demand was down to 17 million tonnes in 2019 compared to 19 million tonnes in 2018.
Meanwhile, it said the average selling price of cement improved from RM225 per tonne in the fourth quarter of 2019 from RM200 per tonne in the previous quarter.
UOB said that the local cement price is expected to improve in 2020 to RM230-RM240 per tonne, which would benefit companies like Malayan Cement.
Interestingly, despite the decline in the sale of cement in the local market, Malayan Cement said its export market, especially Singapore, had improved in the recent quarter.
Another cement player listed on Bursa Malaysia, Hume Industries Bhd, which is also in the red, says it expects the market to remain challenging despite prices of cement improving this year.
It is worth noting that the local cement players have been in losses over the last two years. Could they return to profitability this year?
Covid-19: AI leverage
IN a move to combat the spread of the Covid-19 virus, MyEG Services Bhd claims it has successfully developed an artificial intelligence (AI)-powered Covid-19 risk profiling system, with historical geolocation and anomaly tracking capabilities for Chinese travellers.
Earlier this week, MyEG announced that it will be making the technology available to the governments of Malaysia and the Philippines.
Despite concerns that Malaysia’s tourism numbers will be impacted by the travel ban imposed on travellers from Wuhan and the areas around Hubei province, the Tourism, Arts and Culture Ministry will not be revising its campaign target of 30 million visitors this year, as it is banking on locals and non-Chinese tourists to make up the numbers.
A travel ban has been implemented in the Philippines.
Philippines tourism secretary Bernadette Romulo-Puyat has estimated that the Philippines will see a revenue loss of 42.9 billion pesos (US$848.62mil) for February to April this year, caused by the ban on non-Filipinos travelling from China, Hong Kong, Macau and Taiwan.
Particularly, in February, the Philippines lost an estimated 16.8 billion pesos (US$332.33mil) due to the travel ban.
MyEG’s Covid-19 risk profiling system could prove to be a boon for the affected tourism industry of both Malaysia and the Philippines.
However, it remains to be seen how effective and accurate MyEG’s system will be to curb the spread of Covid-19 from Chinese travellers.
As of Friday, the number of Covid-19 cases stood at 76,497 and 2,247 deaths.
Over in Canada, startup BlueDot has utilised AI to develop an algorithm to detect and monitor the spread of infectious diseases through news articles and air traffic information.
To be sure, China, which is known to have very advanced AI, is already using the technology extensively to curtail the outbreak. A recent Reuters article reported that the recent Coronavirus outbreak has brought China’s surveillance state out of the shadows. It said that AI systems there are now providing the authorities with justification for sweeping methods of high-tech social control.
AI and security camera companies boast that their systems can scan the streets for people with even low-grade fevers, recognise their faces even if they are wearing masks and report them to the authorities.